UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/ x / Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 33-26097-01
PARKER & PARSLEY 89-A, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2297058
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (915) 683-4768
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes / x / No / /
Page 1 of 11 pages.
-There are no exhibits-
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PARKER & PARSLEY 89-A, L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1996 and
December 31, 1995 ................................. 3
Statements of Operations for the three and nine
months ended September 30, 1996 and 1995.............. 4
Statement of Partners' Capital for the nine months
ended September 30, 1996.............................. 5
Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995........................... 6
Notes to Financial Statements........................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................... 7
Part II Other Information....................................... 10
Signatures.......................................... 11
2
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1996 1995
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $195,121 at September 30
and $170,108 at December 31 $ 195,254 $ 170,141
Accounts receivable - oil and gas sales 104,390 95,946
---------- ----------
Total current assets 299,644 266,087
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,709,531 6,712,280
Accumulated depletion (4,108,819) (3,957,167)
---------- ----------
Net oil and gas properties 2,600,712 2,755,113
---------- ----------
$ 2,900,356 $ 3,021,200
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 46,385 $ 62,091
Partners' capital:
Limited partners (8,317 interests) 2,825,247 2,929,323
Managing general partner 28,724 29,786
---------- ----------
2,853,971 2,959,109
---------- ----------
$ 2,900,356 $ 3,021,200
========== ==========
The financial information included as of September 30, 1996 has been prepared
by management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------- ---------- ---------
1996 1995 1996 1995
--------- --------- ---------- ---------
Revenues:
Oil and gas $ 257,114 $ 227,927 $ 802,427 $ 710,280
Interest 2,687 2,599 6,766 6,664
-------- -------- -------- --------
259,801 230,526 809,193 716,944
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 96,766 106,360 323,712 341,758
General and administrative 8,199 6,112 25,467 21,308
Depletion 43,458 106,873 151,652 302,741
-------- -------- -------- --------
148,423 219,345 500,831 665,807
-------- -------- -------- --------
Net income $ 111,378 $ 11,181 $ 308,362 $ 51,137
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,113 $ 112 $ 3,083 $ 511
======== ======== ======== ========
Limited partners $ 110,265 $ 11,069 $ 305,279 $ 50,626
======== ======== ======== ========
Net income per limited
partnership interest $ 13.26 $ 1.33 $ 36.71 $ 6.09
======== ======== ======== ========
Distributions per limited
partnership interest $ 19.02 $ 13.97 $ 49.22 $ 43.70
======== ======== ======== ========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ----------- -----------
Balance at January 1, 1996 $ 29,786 $ 2,929,323 $ 2,959,109
Distributions (4,145) (409,355) (413,500)
Net income 3,083 305,279 308,362
-------- ---------- ----------
Balance at September 30, 1996 $ 28,724 $ 2,825,247 $ 2,853,971
======== ========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
----------------------
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 308,362 $ 51,137
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 151,652 302,741
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (8,444) 5,378
Increase (decrease) in accounts payable (15,706) 36,087
-------- --------
Net cash provided by operating activities 435,864 395,343
-------- --------
Cash flows from investing activities:
(Additions) deletions to oil and gas properties 2,749 (7,874)
Cash flows from financing activities:
Cash distributions to partners (413,500) (367,165)
-------- --------
Net increase in cash and cash equivalents 25,113 20,304
Cash and cash equivalents at beginning of period 170,141 117,053
-------- --------
Cash and cash equivalents at end of period $ 195,254 $ 137,357
======== ========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
6
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
Note 1.
Parker & Parsley 89-A, L.P. (the "Registrant") is a limited partnership
organized in 1989 under the laws of the State of Delaware.
The Registrant engages primarily in oil and gas development and production in
Texas and is not involved in any industry segment other than oil and gas.
Note 2.
In the opinion of management, the Registrant's unaudited financial statements as
of September 30, 1996 and for the three and nine months ended September 30, 1996
and 1995 include all adjustments and accruals consisting only of normal
recurring accrual adjustments which are necessary for a fair presentation of the
results for the interim period. These interim results are not necessarily
indicative of results for a full year.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Registrant's Report on Form 10-K for the year ended
December 31, 1995, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Steven L. Beal, Senior Vice
President, 303 West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Nine months ended September 30, 1996 compared with nine months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $802,427 from $710,280 for
the nine months ended September 30, 1996 and 1995, respectively, an increase of
13%. The increase in revenues resulted from higher average prices received per
barrel of oil and mcf of gas, offset by a 9% decline in barrels of oil produced
and sold and a 14% decline in mcf of gas produced and sold. For the nine months
ended September 30, 1996, 27,017 barrels of oil were sold compared to 29,619 for
the same period in 1995, a decrease of 2,602 barrels. For the nine months ended
September 30, 1996, 102,999 mcf of gas were sold compared to 119,461 for the
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same period in 1995, a decrease of 16,462 mcf. The decreases in oil and gas
production were due to the decline characteristics of the Registrant's oil and
gas properties. Management expects a certain amount of decline in production to
continue in the future until the Registrant's economically recoverable reserves
are fully depleted.
The average price received per barrel of oil increased $3.57, or 21%, from
$17.24 for the nine months ended September 30, 1995 to $20.81 for the same
period in 1996 while the average price received per mcf of gas increased 40%
from $1.67 during the nine months ended September 30, 1995 to $2.33 in 1996. The
market price for oil and gas has been extremely volatile in the past decade, and
management expects a certain amount of volatility to continue in the foreseeable
future. The Registrant may therefore sell its future oil and gas production at
average prices lower or higher than that received during the nine months ended
September 30, 1996.
Costs and Expenses:
Total costs and expenses decreased to $500,831 for the nine months ended
September 30, 1996 as compared to $665,807 for the same period in 1995, a
decrease of $164,976, or 25%. This decrease was due to declines in production
costs and depletion, offset by an increase in general and administrative
expenses ("G&A").
Production costs were $323,712 for the nine months ended September 30, 1996 and
$341,758 for the same period in 1995 resulting in an $18,046 decrease, or 5%.
The decrease was the result of a decline in well repair and maintenance costs,
offset by an increase in workover expense.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 20% from $21,308 for the nine months ended
September 30, 1995 to $25,467 for the same period in 1996.
Depletion was $151,652 for the nine months ended September 30, 1996 compared to
$302,741 for the same period in 1995, representing a decrease of $151,089, or
50%. This decrease was primarily attributable to the following factors: (i) a
reduction in the Registrant's net depletable basis from charges taken in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of", (ii) a reduction in oil production of 2,602 barrels for the nine months
ended September 30, 1996 as compared to the same period in 1995, and (iii) an
increase in oil and gas reserves during the third quarter of 1996 as a result of
higher commodity prices.
Three months ended September 30, 1996 compared with three months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $257,114 from $227,927 for
the three months ended September 30, 1996 and 1994, respectively, an increase of
13%. The increase in revenues resulted from higher average prices received per
8
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barrel of oil and mcf of gas, offset by an 11% decline in barrels of oil
produced and sold and a 27% decline in mcf of gas produced and sold. For the
three months ended September 30, 1996, 8,657 barrels of oil were sold compared
to 9,715 for the same period in 1995, a decrease of 1,058 barrels. For the three
months ended September 30, 1996, 31,414 mcf of gas were sold compared to 42,763
for the same period in 1995, a decrease of 11,349 mcf. The decreases in
production were due to the decline characteristics of the Registrant's oil and
gas properties.
The average price received per barrel of oil increased $5.10, or 31%, from
$16.48 for the three months ended September 30, 1995 to $21.58 for the same
period in 1996 while the average price received per mcf of gas increased 41%
from $1.59 during the three months ended September 30, 1995 to $2.24 in 1996.
Costs and Expenses:
Total costs and expenses decreased to $148,423 for the three months ended
September 30, 1996 as compared to $219,345 for the same period in 1995, a
decrease of $70,922, or 32%. This decrease was due to declines in production
costs and depletion, offset by an increase in G&A.
Production costs were $96,766 for the three months ended September 30, 1996 and
$106,360 for the same period in 1995, resulting in a $9,594 decrease, or 9%. The
decrease was primarily the result of a reduction in well repair and maintenance
costs.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 34% from $6,112 for the three months ended
September 30, 1995 to $8,199 for the same period in 1996.
Depletion was $43,458 for the three months ended September 30, 1996 compared to
$106,873 for the same period in 1995. This represented a decrease in depletion
of $63,415, or 59%, primarily attributable to the following factors: (i) a
reduction in the Registrant's net depletable basis from charges taken in
accordance with FAS 121, (ii) a reduction in oil production of 1,058 barrels for
the three months ended September 30, 1996 as compared to the same period in
1995, and (iii) an increase in oil and gas reserves during the third quarter
of 1996 as a result of higher commidity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $40,521 during the nine
months ended September 30, 1996 from the same period ended September 30, 1995.
This increase was primarily attributable to an increase in oil and gas sales,
offset by an increase in production costs paid.
Net Cash Provided by (Used in) Investing Activities
The Registrant's investing activities during the nine months ended September 30,
1996 and 1995, respectively, were related to the disposal or replacement of oil
and gas equipment on active properties.
9
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Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1996 to cover
distributions to the partners of $413,500 of which $409,355 was distributed to
the limited partners and $4,145 to the managing general partner. For the same
period ended September 30, 1995, cash was sufficient for distributions to the
partners of $367,165 of which $363,490 was distributed to the limited partners
and $3,675 to the managing general partner.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- - ---------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward looking statements that involve
risks and uncertainties. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward looking statements.
Part II. Other Information
None.
10
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARKER & PARSLEY 89-A, L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: November 11, 1996 By: /s/ Steven L. Beal
----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
11
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<NAME> 89A.TXT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 195,254
<SECURITIES> 0
<RECEIVABLES> 104,390
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 299,644
<PP&E> 6,709,531
<DEPRECIATION> 4,108,819
<TOTAL-ASSETS> 2,900,356
<CURRENT-LIABILITIES> 46,385
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,853,971
<TOTAL-LIABILITY-AND-EQUITY> 2,900,356
<SALES> 802,427
<TOTAL-REVENUES> 809,193
<CGS> 0
<TOTAL-COSTS> 500,831
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 308,362
<INCOME-TAX> 0
<INCOME-CONTINUING> 308,362
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 308,362
<EPS-PRIMARY> 36.71
<EPS-DILUTED> 0
</TABLE>